The opinion
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
BATON ROUGE SHEET METAL CIVIL ACTION
WORKERS’ LOCAL UNION #21
PENSION FUND
VERSUS
ANN E, PAUL NO: 21-00152-BAJ-EWD
RULING AND ORDER
Before the Court is the Motion for Default Judgment (Doe. 21) filed by the
Baton Rouge Sheet Metal Workers’ Local Union #21 Pension Fund, The Motion is
unopposed. For the reasons stated herein, Plaintiffs Motion is GRANTED IN PART.
I. BACKGROUND
a. Alleged Facts
In its Complaint, Plaintiff asserts that Defendant Ann E. Paul received 148
monthly payments from Plaintiff to which she was not entitled. Plaintiff is a multi-
employer employee benefit plan operated under the provisions of the Employee
Retirement Income Security Act.
Plaintiff paid retirement benefits to Warren L. Gautreau, a former member of
the Baton Rouge Sheet Metal Workers’ Local Union #21, in the amount of $813.58.
(Doc. 21, p. 2). Mr. Gautreua died in September 1998: thereafter, survivor’s
retirement benefits were paid by Plaintiff to Annabelle Elizabeth Gautreau, his
widow and surviving spouse, in the amount of $406.791. id. These payments were
made to a J.P. Morgan Chase Bank, N.A. account ending in 36765. Id. at p. 3
In February 2020, Plaintiff sent a letter to Mrs. Gautreau. However, the letter
was stamped “Return to Sender — Attempted — Not Known — Unable to Forward.” Jd.
at p. 3. After some research Plaintiff discovered that Mrs. Gautreua died in April
2008. Id. Thereafter, Plaintiff issued a subpoena to J.P. Morgan Chase to determine
the name of the account holder for the account ending in 386765. Id. J.P. Morgan
Chase informed Plaintiff that Defendant Ann E. Paul was the account holder. Id. at
p. 4
b. Procedural History
On June 21, 2021, Plaintiff filed a First Amended Complaint asserting the
same claims against Defendant Ann E. Paul. (Doc. 9). Defendant was served with the
amended complaint on June 380, 2021. (Doc. 13). Defendant failed to answer the
amended complaint. On October 20, 2021, Plaintiff filed its First Motion for Clerks
Iintry of Default as to Defendant. (Doc. 19). The Clerk of Court granted the motion.
(Doc. 20). On November 8, 2021, Plaintiff subsequently filed its First Motion for
Default Judgment as to Defendant. (Dec. 21).
STANDARD OF REVIEW
The United States Court of Appeals for the Fifth Circuit has adopted a three-step
process to obtain a default judgment. See New York Life Ins. Co. v. Brown, 84 F.3d
‘Under the Baton Rouge Sheet Metal Workers’ Pension Plan the surviving spouse of a
retiree was entitled to receive 50% of monthly retirement benefits paid to the retiree until
the spouse’s death. (Doc. 21, p. 5)
137, 141 (5th Cir. 1996). First, a default occurs when a party “has failed to plead or
otherwise defend” against an action. Fed. R. Civ. P. 55(a). Next, an entry of default
must be entered by the clerk when the default is shown “by affidavit or otherwise.”
See Id.; New York Life Ins. Co., 84 F.3d at 141. Third, a party may apply to the court.
for a default judgment after an entry of default. Fed. R. Civ. P. 55(b); New York Life
ins. Co., 84 F.3d at 141.
After a motion for a default judgment is filed, the court must apply a two-part
process to determine whether a default judgment should be entered. First, a court
must consider whether the entry of default judgment is appropriate under the
circumstances. Lindsey v. Prive Corp., 161 F.8d 886, 898 (5th Cir. 1998). Several
factors are relevant to this inquiry, including the following: (1) whether there are
material issues of fact; (2) whether there has been substantial prejudice; (8) whether
the grounds for default have been clearly established; (4) whether the default was
caused by excusable neglect or good faith mistake; (5) the harshness of the default
judgment; and (6) whether the court would think itself obliged to set aside the default
ona motion by Defendant. Id. Default judgments are disfavored due to a strong policy
in favor of decisions on the merits and against resolution of cases through default
judgments. Id. Generally, default judgments are “available only when the adversary
process has been halted because of an essentially unresponsive party.” Sun Bank of
Ocala v. Pelican Homestead & Sav. Ass'n, 874 F.2d 274, 276 (5th Cir. 1989) (citation
omitted).
Second, the Court must assess the merits of Plaintiff's claims and determine
whether Plaintiff has a claim for relief. Hamdan v. Tiger Bros. Food Mart, Inc., No.
CV 15-00412, 2016 WL 1192679, at *2 (M.D. La. Mar. 22, 2016).
Ill. DISCUSSION
“Default judgments are a drastic remedy, not favored by the Federal Rules and
resorted to by courts only in extreme situations.” Reyes, 2020 WL 504659, at *2 (citing
Lindsey, 161 F.3d at 893). Here, however, Plaintiffs Amended Complaint remains
unanswered, the Clerk of Court has entered default, and Plaintiff has filed a motion
for default judgment. Thus, the procedural requirements for default judgment have
been satisfied, New York Life, 84 F.3d at 141, and the Court may turn to the merits
of the Plaintiffs request. All Lindsey factors plainly favor entry of default judgment
in Plaintiffs favor.
a. Whether Default Judgment is Appropriate
The Court must determine whether default judgment is appropriate under the
circumstances by considering the Lindsey factors. Lindsey, 161 F.3d at 893. Here,
Defendant failed to file an answer to Plaintiffs Amended Complaint. (Doc. 9). Thus,
there are no material issues of fact. See Id. No evidence before the Court indicates
either substantial prejudice or that Defendant’s failure to respond or appear was the
result of “good faith mistake or excusable neglect.” See Id. Defendant’s failure to file
any responsive pleadings or otherwise defend the instant lawsuit mitigates the
harshness of a default judgment. See fd. Finally, the record contains no facts giving
rise to good cause to set aside the default judgment if challenged by Defendant. See
Lindsey, 161 F.8d at 893. Thus, the Court finds that the Lindsey factors weigh in
favor of entry of default judgment in favor of Plaintiff.
b. Whether Plaintiff's Complaint Establishes a Viable Claim for
Relief
The Court must also assess the merits of Plaintiff's claims to determine whether
Plaintiffs Amended Complaint establishes a viable claim for relief. Hamdan v. Tiger
Bros. Food Mart, Inc., No. CV 15-00412, 2016 WL 1192679, ay *2 (M.D. La. Mar. 22,
2016).
Plaintiff brings claims under the “Baton Rouge Sheet Metal Workers’ Pension
Plan” (Doc. 21) and 29 U.S.C. § 1132(a)(8).2 Section 9.01 provides that “monthly
benefits shall continue to the Spouse of the Retiree, provided the Spouse survived the
Retiree, and shall continue to be paid monthly during the lifetime of the Spouse,
terminating with the payment preceding the Spouse’s Death.” (Doc. 21, p. 5).
Plaintiff paid benefits to Warren L. Gautreau until his death in September 1993.
(Doc. 99 6). Thereafter, Plaintiff paid benefits to Annabelle Elizabeth Gautreau to a
bank account a J.P. Morgan Chase Bank, N.A. ending in 36765. (Doc. 9 {| 8).
Annabelle Gautreau died in April 2008; however, as noted payments to the bank
account continued until March 2020. (Doc. 9 { 13). Defendant became the owner of
the account ending in 36765 and converted to her own use $58,577.76. Defendant
never informed Plaintiff of Annabelle Gautreau’s death and she obtained money to
which she was not entitled under the Plan. Thus, the uncontroverted facts show that
2 Under 29 U.S.C. § 1132(a)(3), a civil action may be brought by a participant, beneficiary, or
fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or
the terms of the plan, or (B) to obtain other appropriate equitable relief (j) to redress such
violations or (11) to enforce any provisions of this subchapter or the terms of the plan.
Plaintiff has established a reliable claim for relief.
c. Damages
A defaulting defendant “concedes the truth of the allegations of the Complaint
concerning defendant's liability, but not damages.” Ins. Co. of the Wu. H&G
Contractors, Inc., 2011 WL 4738197, *4 (S.D. Tex., Oct. 5, 2011). A court's award of
damages in a default judgment must be determined after a hearing, unless the
amount claimed can be demonstrated “by detailed affidavits establishing the
necessary facts.” United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979).
If a court can mathematically calculate the amount of damages based on the
pleadings and supporting documents, a hearing is unnecessary. Joe Hand
Promotions, Inc. v. Ama, No. 3:183-CV—0889-B, 2014 WL 1632158, at *3 (N.D. Tex.
Apr. 22, 2014) (citing James v. Frame, 6 F.3d 807, 310 (5th Cir. 1993)).
Here, Plaintiff asserts damages of $58,577.76. The Plan provides that the
surviving spouse of the Retiree will be paid 50% of the monthly benefits the Retiree
was entitled to until the spouse’s death. (Doc. 21, p. 5). Warren Gautreau was entitled
to $813.58 monthly, thus upon his death Annabelle Gautreau was entitled to $406.79
monthly. (Doc. 21, p. 8). Annabelle Gautreau died in April 2008. Yet, because
Plaintiff was not notified of her death, the surviving spouse benefit payments
continued to be paid through March 2020. Thus, 143 payments were made after
Annabelle Gautreau’s death, totaling $58,577.76 in payments.
d. Pre-judgment Interest
Plaintiff also seeks prejudgment interest in the amount of $35,509.00 in lost
investment income based on calculation of the “actual, annual rate of return the Fund
received on its investments during the years in question.” (Doc. 21, p. 5). “An award
of prejudgment interest is permissible (1) if the federal statute creating the cause of
action does not preclude such interest, and (2) if an award of prejudgment interest
would further the policies underlying the statute. See, Carpenters Dist. Council v.
Dillard Dep't Stores, Inc., 15 F.8d 1275, 1288 (5th Cir.1994); Transitional Learning
Community v. Metropolitan Life Ins. Co., 913 F.Supp. 504, 508 (S.D.Tex.1996).
When these two criteria are met, the court has discretion to award prejudgment
interest. See Carpenters, 15 F.3d at 1288 (citing Calderon v. Presidio Valley Farmers
Ass'n, 863 F.2d 384, 392 (5th Cir.1989)).” “The award of prejudgment interest ‘is
based on the equitable grounds that an injured party should be made whole.”
Executone Info. Sys., Inc. v. Davis, 26 F.3d 1314, 1880 (5th Cir.1994).
In the context of ERISA, awards of prejudgment interest are justified as
furthering the congressional policies embodied in the act. Tesch v. Prudential Ins. Co.
of Am., 829 F. Supp. 2d 488, 502 (W.D. La. 2011). Plaintiff was denied the opportunity
to invest the funds in question to inure to the benefit of other beneficiaries of the
fund. The Court will thus exercise its discretion in Plaintiff's favor and award interest
on the benefits that were fraudulently received by Defendant.
IV. CONCLUSION
Accordingly,
IT IS ORDERED that Plaintiffs Motion for Default Judgment (Doc. 21) is
GRANTED IN PART.
IT IS FURTHER ORDERED that Defendant Ann E. Paul is liable to Plaintiff
for a total amount of $58,577.76, together with pre-judgment interest thereon in
an amount of $35,509.00 (calculated on the basis of the actual, annual rates of
return the Fund received on its investments during the years in question,
sustained by the Fund as a result of the wrongful taking of the payments at issue
herein).
IT IS FURTHER ORDERED that to the extent that Plaintiff requests
attorney's fees and costs, the request is DENIED WITHOUT PREJUDICE.
Plaintiff may file a separate motion seeking attorney's fees and associated costs
in conformity with the requirements of Federal Rule of Civil Procedure 54(d).
Baton Rouge, Louisiana, this oat of May, 2022
(Ka
oboe
UNITED STATES D ICT COURT
MIDDLE DISTRICT OF LOUISIANA